Provident Financial Services (PFS) Q4 2024 earnings summary

Executive summary

• Fourth quarter 2024 net earnings were $48.5 million ($0.37 per share), with adjusted ROA at 1.05% and adjusted ROATCE at 15.39%.

• Full-year 2024 net income was $115.5 million ($1.05 per share), down from $128.4 million in 2023.

• Results reflect the completed May 2024 merger with Lakeland Bancorp, adding $10.91 billion in assets, $7.91 billion in loans, and $8.62 billion in deposits.

• All merger-related charges from the Lakeland Bancorp acquisition have been recognized, with no further merger expenses expected in 2025.

• Asset quality improved, with non-performing loans to total loans at 0.39% (down from 0.47% in Q3 2024).

Financial highlights

• Core earnings, excluding merger charges, were $62.9 million ($0.48 per share) for the quarter.

• Net interest income for Q4 2024 was $181.7 million, up $85.9 million year-over-year due to the Lakeland merger.

• Net interest margin was 3.28% in Q4 2024, up 36 bps year-over-year; core net interest margin increased 4 bps to 2.85%.

• Deposits grew $248 million (5.4% annualized) to $18.6 billion; average cost of total deposits decreased 11 bps to 2.25%.

• Non-interest income for Q4 2024 was $24.2 million, up $5.2 million year-over-year, but decreased sequentially due to fewer BOLI claims and seasonal insurance income reduction.

Outlook and guidance

• Projected 2025 NIM is 3.35%-3.45%, assuming two 25 bps rate cuts in September and December.

• Estimated 2025 ROA is 1.15%, ROATCE is 16%, operating expense ratio is 1.80%, and efficiency ratio is 52%.

• Quarterly core operating expenses are projected at $112-$115 million for 2025; effective tax rate expected to be 29.5%.

• Management expects further performance improvement in 2025 following the completed integration of Lakeland.